Thejo Engineering eyes higher CAGR in 5 years on domestic-cum-international growth

G Balachandar Chennai | Updated on September 28, 2021

It intends to maintain its premium position in the conveyor services segment.

Thejo Engineering Ltd (TEL), engaged in providing servicing operations to the conveyor belt and bulk material handling systems in core sectors of the economy, expects to achieve higher CAGR (compounded annual growth rate) in the next five years, helped by growing opportunities in the Indian core industries and improving international business.

The company intends to maintain its premium position in the conveyor services segment in India going forward by growing its business further. With its presence in 51 sites, including steel, coal, mining, power, iron ore and aluminium plants, among others across India, the company has about 65-70 per cent market share in the organised segment.

The company, which has five manufacturing units and an R&D Centre, has a balanced portfolio of products and services, which has helped TEL to moderate the impact of cyclicality experienced by its customers.

TEL, which is also engaged in manufacturing rubber-based conveyor support systems, corrosion protection products and filtration parts, sees Operation and Maintenance (O&M) as one of the key growth areas for the future. Since the company has emerged as a niche player by providing both services and products in the conveyor system areas, it sees O&M business to add value in the long run as its products and services will be built into O&M to offer long term contracts to its clients.

“O&M market is maturing in India, and it will become a big thing going forward, '' says V A George, Chairman of TEL.

Also, due to upcomin regulatory changes on the back of environment-related concerns, there will be opportunities for pipe conveyors for transport materials such as iron ore, coal etc. The present system of open conveyors will be replaced by pipe conveyors, which will open during material unloading, close during movement and open again for unloading. “This will offer huge potential for us going forward,” he said.

With a favourable growth outlook, the first to be listed on EMERGE - SME Exchange of the NSE, targets higher CAGR in the next five years. The company reported consolidated revenue of ₹330 crore in FY21 and EBITDA of .₹52 crore. Its revenue grew at a CAGR of 14 per cent from FY18 to FY21, while EBITDA CAGR was 23 per cent.

George points out that the company’s international business was also seeing good momentum, particularly in the Australian market. High global demand prompted several major Australian mining companies to commit to new mining projects and expansions. This helped TEL’s subsidiary in Australia to run profitably. Though its other international markets reported mixed performance in FY21, businesses were steady in all markets.

“The international strategy spearheaded by Manoj Joseph, Managing Director, has paid dividends now. Going forward, we will focus on aggressive growth in Australia, Saudi Arabia, Chile and Brazil before expanding to other regions,” he added.

In the international markets, it focuses mostly on establishing its bulk material handling product business.

Published on September 28, 2021

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